It's pretty well documented that datacenters (esp the AI variety) are offloading grid expenses to customers as higher baseline costs.
The issue is that these DCs are not paying for the cost of the necessary grid upgrades but are instead having the power cos pass these costs off to all consumers as base increases.
I agree with your take on tradeoffs when it comes to DCs that are built with tax abatements, which are a terrible deal for consumers. Those that are not receiving tax benefits will make up for short-term energy prices with long-term property tax benefits, that will eventually pay back the grid upgrades and fund even more upgrades in the future.
I would think that consumers would vastly benefit from cheaper software, nearly unlimited cloud storage, lower property taxes. Heck, the next generation of data centers are looking like they will actually be net energy producers.
Consumers might not know that they benefit from data centers, but that doesn’t mean that they don’t
Consumers across the US are the residents. They're the same people. Especially when it comes to those living around data centers. The CEOs of amazon, google, and microsoft aren't living next to data centers and being subjected to the worst of the harms those data centers cause. The people who live near data centers are the consumers of those companies (while also being the products those companies sell). The consumers buying RAM and GPUs are the same people suffering from the pollution data centers cause and paying the price for the environmental harms. We are the consumers. You, me, and our families.
Nearly unlimited cloud storage - AWS / Google / etc. Data centers are the Cloud
Lower property taxes - data centers increase the property tax base, creating tax compression, which shift property tax from consumer –> company. I'm in Texas, so can only be sure that is true here. I have not looked at all other states.
Cheaper software: where is this cheaper software? Most users don't pay for most software. Facebook/Instagram are introducing paid plans now. LLM companies are seemingly starting to increase prices.
Unlimited cloud storage: Where are consumers getting unlimited cloud storage from? I'm not aware of AWS/Google/others reducing prices/providing unlimited plans.
Oh stop. Both of those are a bit ridiculous. We are talking about the sudden surge of data centers, the past 1-3 years, not the 20 prior to that.
Sourcing a tweet that doesn't have a real source (saying source: BLS without an actual reference to BLS isn't a source) is worthless.
Consumers don't buy software, they buy services. Whether or not that is captured by your source in the "Computer Software" is unknown, since I don't have the source. FRED via BLS has PPI for software publishers going up in the last ~6 years, but that's not exactly analogous to consumer spend.
When you say 2tb for $9 is unfathomable if you travel back in time, yes obviously if you go back to floppy days it's comical. Cloud storage prices have been the same for a decade now (pre LLM boom).
So software may or may not be cheaper for consumers (hard to say, nobody buys software). And in real dollars cloud storage is cheaper because of inflation. Not sure what the significant gain is.
My original list was just some brief examples, all of which I think hold up, but not nearly the entire list of data center benefits to all consumers. (One of those other benefits being the means to have this very conversation). There isn’t much of a way I can see to remove data centers from the technological progress we’ve benefited from over the last couple of decades.
> There isn’t much of a way I can see to remove data centers from the technological progress we’ve benefited from over the last couple of decades.
That's not really the argument.
The problem with the tweet is that the chart kind of sucks, and it isn't immediately obvious. The category cited is "Computer Software and Accessories" which is under "Information Technology, Commodities"
A more interesting category is "Video and Audio services," specifically the live streaming subcategory. People don't buy software anymore, they pay for subscriptions to services.
So IT price index is down, frankly to a huge degree. But that includes hardware, so it's hard to draw conclusions about software pricing from that specific chart. But Video/Audio services have seen a fairly sizable increase in index in the last decade.
But that's not really very important. We are talking about price indexes, which do tell us roughly how expensive something is over time, but who cares about the price of basketballs unless that's something I plan on buying as a consumer? The BLS charts give a relative importance which we can use a proxy for "how much a price change would affect the consumer." The relative important of the IT category (linked) is 0.745, but the software subcategory is 0.029. Video/audio and live streaming are 0.595 and 0.185, respectively.
Consumers do not purchase software. Companies don't even bother trying to sell software to consumers. The chart linked is tracking a metric that doesn't matter, because it's not important to consumers.
I think your point on costs here is right. I was treating “computer software” as anything that consumers use: apps that provide a service for free in exchange for data, etc.
The data centers being built due to the AI bubble are predominately increasing costs for public utilities. Many localities are having to make significant investments to keep the lights on and increasing rates for everyone.
If half of these datacenters go out of business next year, it will get even worse when mom and pop will be left with the bill for these projects.
I don't see a widespread issue in keeping the lights on, outside of the Lake Tahoe fubar.
Considering utility rates, I would happily pay more for utilities in the short term to have 30+ years of lower property taxes. The data centers property taxes would go to paying for that buildout, and over time it's a great deal for consumers. That said, I'm in Texas so the property tax issue is more prevalent than it would be in New York.
Lake Tahoe might be the only area literally with issues keeping the lights on, but many more are facing rate hikes and debt spending to build out infrastructure and keep up with increases in demand for utilities.
The prevailing idea is that we're currently in a bubble, especially when it comes to AI hyperscalers, and that the tax revenue will decline when the bubble pops.
Also, not all localities have updated their public utility regs to appropriately assign the costs of infrastructure projects to these new projects. Many, like NoVA have just recently added new utility rate classes specifically for data centers to attempt to do that. In other places, these costs are often are being split among the existing utility customers.
To my understanding Apple's supply contracts have allowed them to keep prices flat compared to other brands, but the price of non-Mac desktops and laptops are absolutely ballooning right now because of the supply of memory chips. Apple themselves just last month increased the base price of the Mac Mini by 33% from $599 to $799.
It seems to me that anyone going out of their way to compare current prices against prices from five or more years ago to adjust for inflation is not the average consumer, and shouldn't be juxtaposed as such.
High margin products are often the last to be impacted at retail because the seller has some cushion. And the impacts are only just getting started. We see the MacBook Neo with a somewhat sad 8GB RAM, most likely due to this. We'll see a combination of just plain higher prices (Steam Deck and Switch 2 have both gone up) and shrinkflation in the form of lower specs.
The Macbook Neo is 8GB because the A18 Pro has 8GB memory baked into its sandwich-style package at TSMC. The way these SoCs are constructed doesn't lend itself to having it paired with an arbitrary choice in memory specification the way other laptops do.
And Apple has longer-term contracts for delivery of their chips. Apple is more insulated from short term supply shocks because of this, and their giant pile of cash. But even they have discontinued some high-RAM configurations because of the situation.
As you mention, products elsewhere that use RAM have already gone up in price.
It is also worth noting that the non-wealthy pay for higher education in two ways: first through tuition, and second through the taxes required to fund the very programs that provided their "discount."
The line drawing was a policy decision, and it makes regional level policymaking near impossible, creating adverse incentives for suburban jurisdictions and constraining the options of local policymakers in SF. It’s the cause of many of the Bay Area’s current social woes.
Put your same prompt into Bard and it didn't even hallucinate for me first, just telling me "I can't assist you with that, as I'm only a language model and don't have the capacity to understand and respond."
Only about 10 minutes into Bard right now but this is the first time its been stumped. Haven't tried much code yet though
Overall, UX and speed are good. Results are not bad.
Yeah, it was a slight variation of it that I used where it gave me the hallucinated code (EDIT: just found the prompt, tried it again, and got a different hallucination [0]):
> Write a React program to display a counter, and a button labeled "decrease." The counter should start at 0. Clicking the button should decrement the counter by 2, unless that would cause the counter to go below 0. Every second, the counter should increment by 1. If clicking the button would cause the counter to go below 0, the button should be disabled.
Agreed the speed is impressive, although some of that might be due to its limited context memory. The UX is fine, but it's not like that's a difficult thing to implement.
I was thinking about this last night. The new AI tools are like performance enhancing drugs in sports. Especially in bodybuilding, there was a really painful transition from the world of non-PEDs to PEDs. They solved that by going to natural and non-natural competitions.
Other sports didn’t handle it so well (baseball, cycling, etc)
Just as people were asking “did Lance / Sammy / Barry / Arnold really do that incredible feat without juicing?” I think that we will now be asking “did Janice really write that blog post or was it GPT-4?”
PEDs do not make you a world class athlete, but you likely cannot be a world class athlete without some sort of PEDs. Much like PED use, top performers will take advantage of the new tools to widen the skill gap with their peers even further.
Nor do the muscles (from the point where you are strong enough so the ball can reach the basket), and yet you will not see a basketball players that is not muscular.
PEDs allow you to gain muscles faster and have greater stamina, all of which is beneficial.
> All pro golfers?
Of course I was talking mainly about sports where physical performance matters. Although PEDs exists even in e-sport (Adderall).
Really cool and interesting. I definitely think the market is there for this.
I'm betting that your biggest hurdle will be post-purchase. If I remember correctly, Tony Fadell talks about how hard it was to disrupt the contractor model when building Nest. People often just bought whatever thermostat their contractor recommended, and those contractors were incentivized to push them towards specific brands. They beat this by just making the product super easy to install by the consumer and cutting out the contractor all together (something I doubt is feasible with a heat pump).
Maybe that won't be a problem with the DTC model considering the contractor is only brought in post-purchase, but I wonder if this really takes hold if competitors start trying to corner local installers. Good luck!
> They beat this by just making the product super easy to install by the consumer
I think it was more than that, I cannot possibly overstate how stupidly better the design/UX was compared to alternatives. In my home I spent years looking for a replacement for the ancient, round thermostat with a mercury switch. That thermostat is a marvel: you spin the dial with instant visual feedback, and there is an off/heat/ac switch. That's it! The Nest just added networking.
I live in Austin and know the author to boot. I haven't had the time to sit down and read this one yet, but knowing him I can pretty well guess his take. He is my pick for the best writer in the state.
My read of Austin:
- I was born here in 1995. Except for a few years, I've seen double-digit growth in most measurables every year of my life. Growth is the only thing I have ever known so I am comfortable with it, and I can also see why previous generations (I.e. my parents) are not.
- Change is painful. Especially at this clip and for this long. But man, it is beautiful.
- The City Council here is undoubtedly the worst part of the problem. They consistently buckle to NIMBYs, and allocate money in just unreasonably idiotic ways. ("No one riding the train that cost $1.1 billion? Easy fix! Spend $7 billion more!") They are making the change much more painful.
- Natives were largely fine with the first wave of California refugees in 2008. This COVID wave is different though. The new movers kept their jobs and are working remote from Austin – meaning that they still have their Cali / NY inflated paychecks. It feels like a money fight, and we keep losing.
> - The City Council here is undoubtedly the worst part of the problem. They consistently buckle to NIMBYs, and allocate money in just unreasonably idiotic ways. ("No one riding the train that cost $1.1 billion? Easy fix! Spend $7 billion more!") They are making the change much more painful.
Are you referring to Project Connect here? Right now nobody rides the train, but the answer to that problem _is_ to spend more money. Currently the train stops basically nowhere useful unless you are commuting from Leander to downtown, or going to the soccer stadium. The answer to that is to put _more_ stops in, in more useful places. The Domain stop is a ~30 minute walk from all the large businesses in the Domain. The train stops running into town at 6pm, meaning if you stay a little late you miss the train at your Domain office, and its not useful at all if you're trying to go out drinking or something in the city.
Additionally, there are network effects associated with public transit usage, the same as road or bike lane usage. The more places you can get to by public transit, the more likely you are to take public transit to get there. The new rail corridors will make the city far more connected by transit, and thus potentially increase usage of transit.
They spent $1.1 billion on the first round of the train, and in FY2021 it brought in $55,000 in gross fares.
We won’t be able to spend our way to adoption at that rate. And people aren’t going to adopt public transit in a city built around cars (93.4% of Austin families own a vehicle).
Sounds like we both wish mass public transit was the reality, but sadly it’s just not realistic.
This is basically my exact position as a native austinite - personally the transformation was complete for me when Magnolia's on Lake Austin blvd closed.
They also used to hire a hippy to do groundskeeping who would come around with a 5gal bucket (painted with dinosaur stencils) and carrying his pet Bearded dragon named Greg.
I ran into him one time meeting a business associate at Mags on Saturday. I initially just saw Greg, and exclaimed "wow who's lizard got loose" and this guy just came out of nowhere and said "oh, that's greg we do landscaping around here - he just likes to take in the sun while I pickup leaves" and proceeded to talk my ear off about how we needed to go "solar as a society" and how he disliked Donald Trump. It's by far the most "austin" thing to happen to me in recent memory, incredibly wholesome and positive and it all happened on the side of Mags with the big Limestone pavers in 2019.
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